THE PENSION went up by $11.50 for singles and $17.40 for couples (combined) on 20 September 2014.

This brings the full rate pension to $854.30 per fortnight for singles and $1288.00 for couples (including the supplements).

What this latest increase has made apparent is the impact which the Australian Government’s plan to index pensions to CPI alone will have.

If CPI had been used to calculate this latest increase, pensions would have only gone up by $9.30 for singles and $14 for couples (combined). That’s 19 per cent less.

You can imagine the impact over time if, at every six-monthly increase, pensioners get skimped like this.

The September 2014 increase was based on the Pensioner and Beneficiary Living Cost index, which went up by 1.4 per cent over the latest quarter.

This was more than CPI and more than 27.7 per cent of Male Total Average Weekly Earnings, the two other measures which are taken into account.

Traditionally CPI is the lowest of the three index methods considered. It has only been used as the index once out of the last 11 pension increases.

CPI is also the reason why Newstart has dropped so far below the rate of the pension.

Newstart increases are based only on CPI and accounts for why Newstart was worth 91 per cent of the pension in 1997 and is now worth only 61 per cent of the pension.

Every six months Newstart recipients get a substantially smaller increase and their payment is now well below the poverty line. Newstart indexation needs to be brought in line with the pension, not the other way around.

CPSA continues to call on Senators to block these pension measures and allow pensioners to retain their modest pension increases and prevent the value of the pension in real terms being withered away.

CPSA has also joined forces with other groups including the Superannuated Commonwealth Officers’ Association, the Alliance of Defence Service Organisations, the Australian Council of Public Sector Retiree Organisations and the Defence Force Welfare Association to oppose any changes to the existing indexation arrangements for pensions.

As John Coleman, Federal President of the Superannuated Commonwealth Officers’ Association said recently, “the Coalition Government’s decision in 1997 to benchmark the Age Pension to 25 per cent of Male Total Average Weekly Earnings, now 27.7 per cent, was a clear acknowledgement that the CPI indexation it replaced was unfair because pensions weren’t keeping up with actual shop prices”.